Economic growth in New Zealand could keep up the pace it set over the first three months of this year, Westpac's chief economist says.
Figures released yesterday showed gross domestic product grew 1.1% to almost $35 billion in the three months ended March 31, the fastest quarterly pace since March 2007.
Westpac Chief Economist Dominick Stephens told TV ONE's Breakfast that New Zealand may continue to deliver this kind of growth.
"There's always going to be ups and downs and volatility from quarter-to-quarter, but pretty much most economists - especially at Westpac - have long been predicting 3% type growth rates for 2012," he said.
"Our prediction was 0.7% but if you step back to the bigger picture, our consistent message over the past year has been 'the economy was hit hard by the Christchurch earthquakes - as we recover from that and enter the rebuilding phase, we've long been expecting a big acceleration in growth."
While agriculture was touted as the main reason for the growth, Stephens thinks the construction industry will start upping its performance in the near future.
"I'm slightly concerned Statistics New Zealand isn't fully measuring what's going on there - so repairs to houses may not be adequately captured," he said.
"There's a wealth of other evidence suggesting the construction sector is ramping up - for example the number of consents issued has been very very strong, so I think going forward we can expect to see much larger contributions coming from the construction sector and contributing to strong GDP growth over 2012."
Good weather stoked milk production and led to greater dairy manufacturing, seeing agriculture, forestry and fishing rose 2.1% to $2.12 billion in the three months to March 31.
But construction shrank by 0.1%, versus Westpac's expectation for a 1% increase. Statistics NZ also noted quake-related construction did not have a significant impact.
Stephens told Breakfast going forward, we can expect to see much larger contributions coming from the construction sector over 2012.
In response to the statistics, the kiwi jumped briefly over 80 US cents yesterday and this morning traded at 78.65 US cents.